Income Tax Appellate Tribunal - Jaipur
Bhanwaroo Khan Chopdar, Sikar vs Acit, Sikar on 2 December, 2016
vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
Jh dqy Hkkjr] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k
BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ ITA No.166/JP/13
fu/kZkj.k o"kZ@Assessment Year : 2009-10
Shri Bhanwaroo Khan cuke The Income Tax Officer,
Chopdar S/o Shri Lal Mohd.
Vs. Ward-1, Sikar
Chopdar, Near Jagdish
Colony, Sikar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AEUPC 3511 N
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Sharwan Kumar Gupta, Adv.
jktLo dh vksj ls@ Revenue by : Shri Rajendra Jha (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 05.10.2016
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 02/12/2016.
vkns'k@ ORDER
PER SHRI VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of Ld. CIT(A)-III, Jaipur dated 6.11.2012 where in the assessee has taken following grounds of appeal:
(1) On the facts and in the circumstances of the case, the ld. AO had factually and legally erred in rejecting the explanation of the appellant regarding cash deposits of Rs. 17,90,000/- in his saving bank account without appreciating the facts of the case in right perspective.ITA No. 166/JP/13
Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar (2) On the facts and in the circumstances of the case, the ld. AO had factually and legally erred in making addition of Rs. 27,81,000/- u/s 69 of the Act on account of alleged unexplained investment on the basis of so-
called peak theory basis without any basis and also without appreciating the facts of the case in the right perspective.
(3) On the facts and in the circumstances of the case, the ld. CIT(A) had factually and legally erred in enhancing the addition of Rs, 27,81,000/- made by the ld. AO on peak theory basis to Rs. 29,88,000/- denying the alleged benefit of the peak theory without any basis and also without appreciating the facts of the case in right perspective. (4) On the facts and in the circumstances of the case the ld. AO had factually and legally erred in initiating the penalty proceedings u/s 271(1)(c) of the Act.
2. The brief facts of the case are that the appellant had deposited cash of Rs.17,90,000/- in his saving bank account with Central Bank of India, Sikar during the F.Y. 2008-09. It was explained by the appellant that in order to obtain licence for Bhang/Doda Posta shops from the Excise Department, he formed a group of his friends and assistants who contributed cash which was deposited by him in his bank account. Out of these deposits, demand drafts were prepared which were submitted alongwith the applications to the Excise Department. Assessee claimed to have received cash amounts from following persons.
(1) Shri Anil Kumar - Rs. 3,50,000/- (2) Shri Rajendra Singh - Rs. 1,44,000/- (3) Shri Dayal Singh - Rs. 16,30,000/- (4) Shri Puran Mal Pareek -Rs. 90,000/-
2.1 During the course of assessment proceedings, the assessee filed the affidavits of the aforesaid persons confirming their payment of cash amount to the assessee. In order to verify the genuineness of aforesaid creditors, the AO summoned them and recorded their sworn statements. It was observed that 2 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar the signatures of the aforesaid persons do not tally with the signatures on the affidavits prepared in their name. Shri Anil Kumar was working as a labourer in a hotel. He was neither having any bank account nor assessed to tax. It was explained by him that cash of Rs. 1,50,000/- was paid by him out of his past saving and Rs. 2,00,000/- was paid out of sale of agricultural produce. However, he could not produce any evidence to substantiate his sources of investment. Shri Rajendra Singh was working as a salesman in some Bhang/Doda Posta shop. It was stated by him that cash of Rs.1,44,000/- was paid by him out of his past savings and borrowings from colleagues for which no supporting evidence was produced. H was neither having any bank account nor assessed to tax. Shri Rajendra Singh was not aware that he is a proprietor of some concern whose books of accounts were maintained and were audited for A.Y. 2009-10. Shri Dayal Singh was working as an electrician doing domestic fittings. He stated that he paid cash of Rs. 8 lacs to the assessee out of his past saving and loan of Rs.4.5 lacs taken from his relatives. He was neither having any bank account nor assessed to tax. He could not file any evidence to substantiate his source of investment. Shri Dayal Singh was also not aware that he is a proprietor of some concern whose books of accounts were maintained and were audited for A.Y. 2009-10. Shri Puran Mal Pareek was working as a salesman in some Bhang/Doda Posta shop. He stated that he paid cash of Rs.90,000/- out of his past savings and sale of agricultural produce, for which no supporting evidence could be produced. He was neither having any bank account nor assessed to tax. In view of these facts and circumstances of the case, the AO concluded that all the aforesaid four persons were simply name lenders and could not prove their credit worthiness for paying the cash amount to the assessee. The fact that their signatures did not match with the signatures on the affidavits, discrepancies in their statements 3 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar vis-a-vis explanation filed by the assessee etc. proved that the transactions were not genuine. The AO therefore held that the cash deposits in the bank accounts of the assessee remained unexplained and the same were added u/s 69 of the Act. The AO computed the peak credit in the bank account at Rs. 27,81,000/- and added to the returned income.
2.2 Being aggrieved, the appellant carried the matter in appeal before the ld CIT(A) and submitted that the assessee entered into an agreement with the aforesaid four persons for doing the business of bhang/doda posta. As per the agreement, a copy of which was filed in paper book all the said four persons were required to deposit their contributions in cash in the assessee's bank account for the purpose of applying for shop to Excise Department. If the shop is allotted all the persons will run the same with mutual co-operation. Profit and loss of the business will be in the ratio of their capital contribution. It was further stated by AR that since assessee was not aware of the income tax provisions, he wrongly allowed the other persons to make cash deposits in his bank account. The certificate issued by District Excise officer clearly shows that demand drafts were received from different persons. AO was not justified in rejecting the statements of the four creditors wherein they admitted that cash was deposited by them in the appellant's bank accounts. The accounts and documents produced before AO proved the credit worthiness of all the four persons. The ld. AR also challenged the computation of peak credit stating that AP did not consider the opening cash balance as on 01.04.2008 as per balance sheet. Ld. AR relied on various case laws to support his contentions. After considering the submissions of the appellant, the ld. CIT(A) has given his findings as under:
4 ITA No. 166/JP/13Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar "I have duly considered the submission of the ld. AR and the material available on records. I have perused the affidavits and the sworn statements of the four creditors and agree with the conclusion of the AO that appellant has not been able to prove the credit worthiness of the aforesaid creditors and the genuineness of the transaction. There are several contradictions and inconsistencies in the explanation of the appellant submitted from time to time. In his letter dated 30.08.2011, it was stated that the appellant provided only technical service to the said four creditors for obtaining the license for which he earned commission/dalali. However in the undated agreement filed during the appeal proceedings , it was stated that assessee entered into partnership agreement with those persons to do the business of Bhang/Doda Posta where profits/loss of the business were to be shared in the ratio of their capital contribution. Appellant filed the audited accounts of the business allegedly done by Shri Rajendra Singh and Shri Dayal Singh though these persons were themselves not aware about their business and did not mention anything about it in their sworn statements. This shows that the appellant concocted the evidences to substantiate their credit worthiness. While the cash of Rs. 16,30,000/- was claimed to have been received from Shri Dayal Singh later confirmed only payment of Rs.8 lacs to the appellant. None of the alleged creditors could produce any evidence to substantiate their sources of payments to appellant. It is beyond imagination that the persons of no means like a labourer in hotel or an electrician or a salesman of Bhang/Doda Post shop can lend lacs of rupees to the appellant.
It is a settled position of law that the entire onus is on assessee to prove the identity & credit worthiness of the creditors and the genuineness of transaction. Mere proof of identity of creditors or mere filing their income tax numbers / return is not enough to prove the genuineness of credits. Sources of cash deposited in the bank account of the assessee has to be satisfactorily explained by him, otherwise the same can be treated as his unexplained income u/s 69 of the Act. Reliance is placed on the decisions in the case of CIT vs. K. Chinnatharmban (292 ITR
682)(SC) and Manoj Aggarwal vs. DCIT (113 ITD 377) (SB. Del.). In view of above discussion, it is held that the appellant has not been able to discharge his onus of proving the credit worthiness of the aforesaid four persons and the genuineness of transaction. Hence the aforesaid cash deposits in the bank accounts of the appellant are rightly added as his unexplained income u/s 69 of the IT Act.5 ITA No. 166/JP/13
Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar The AO has made an addition only on the peak credit of Rs.27,81,000/-. During the appeal proceedings vide order sheet noting dated 11.10.2012 the Ld AR was asked to show cause why the benefit of peak credit should not be denied since the appellant has not accepted the deposits as his own which will result into enhancement of income. He was asked to file the copies of bank statements. Ld. AR submitted the copies of bank statements of Central Bank of India and Bank of Baroda, from which it is evident that total cash deposits in two bank accounts were of Rs.29,88,000/-. Since the appellant could not prove the source of these cash deposits , the same are required to be added to his unexplained income u/s 69 of the Act. The benefit of peak credit is not allowed to the assessed in view of the decision of Hon'ble Allahabad High court in the case of Bhaiylal Shyam Behari (276 ITR 38) where it was held that :
"For adjudicating upon the plea of peak credit the factual foundation had to be laid by the assessee. He had to own all cash credit entries in the books of account and only thereafter the question of peak credit could be raised. As in the instant case the amount of cash credit were standing in the name of different persons which all along the assessee had been claiming to be genuine deposit, withdrawal payment of the amount to different set of persons during the previous years would not at all entitle the assessee to claim benefit of peak credit. Thus there was no legal infirmity in the Tribunal's order."
2.3 During the course of hearing, the Ld AR firstly submitted that the deposits in his bank accounts are from the cash deposited by the persons who were not having the bank accounts, for the purpose of getting the licenses of Bhang Doda Post and to prepare the demand draft in the name of District Excise officer. The assessee was having the experience and engaged in the business of sale of Bhang Doda Post for last so many years. The Govt. grants the license of Doda Post shop every year to different persons. It is not possible to determine to whom license shall be granted. That is why the assessee and four other persons namely Anil Kumar, Dayal Singh with, Rajendra Singh and Purnamal made a consent agreement among themselves on 10.04.2008 for 6 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar the purposes of getting the license in auction for the F.Y 2009-10 i.e. for A.Y. 2010-11 for which the DD had to deposited in the in the month of March 2009. In this agreement, all the condition has been mentioned. In pursuant to this consent agreement, all four persons had deposited their cash in the bank account of the assessee because all four persons were not having their bank account and were out of Sikar. Thus, out of total deposit of Rs. 29,88,000/- the deposits of Rs.22,14,000/- was of these four persons and rest of Rs. 7,74,000/- belongs to the assessee from his past savings.
The ld AR further submitted that the appellant has fully explained the sources of cash deposit in his bank accounts. In support, the assessee had filed the affidavits, income tax particulars of these persons and other details. These person duly accepted of giving money to the appellant for preparing the DD to apply for the licence of Bhang Doda Post shop in their name as appearing from the above documents. From these documents, it is not appearing that these are bogus. The AO merely proceeded on his own suspicion without making any enquiry or without giving sufficient opportunity of being explained to the assessee. The assessee had also filed the cash flow statements which has also not been denied. Only due to the fact that the assessee allow these persons to deposits their cash in his bank account who were not having bank account, addition cannot be made in the hands of the assessee. Where the AO was having any doubt about the creditworthiness and their source, he could have taken the action in their individuals hand and not in the hands of the assesee.
The ld AR further submitted that the ld. AO to verify the contention of the assessee has made inquiry directly from the District Excise Officer Sikar vide letter dated 16.09.2011 where he mentioned the name of above persons and 7 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar details of demand drafts. In response thereto, the District Excise Officer has confirmed the contention of the assessee vide letter dated 30.10.2011. However, the ld AO and ld. CIT(A) both ignored these very vital facts while completing the assessment proceedings and upholding the additions.
The Ld.AR further submitted the details of cash deposits received from various persons, the details of demand drafts prepared and the amount received back on cancellation of demand drafts and subsequently returned back to the respective persons. In this regard, it was submitted that firstly, the addition of Rs. 29,88,000/- has been made by the ld. AO and CIT(A) on account of total cash deposits in both the bank accounts of the assessee. The source of his Rs.29,88,000/- was as under:
Rs. 3,50,000/- Anil Kumar Explained in statement
Rs. 1,44,000/- Rajendra Singh Explained in statement
Rs. 16,30,000/- Shri Dayal Singh Explained in statement
(Rs. 800000/) and
Rs.8,30,000/- Shri Gajanand
Rs. 90,000/- Sh. Puranmal Rajendra Singh Explained in statement
Total
Rs.22,14,000/-
Rs. 7,74,000/- By the assessee himself Explainable as per record
It was stated that the assessee is an old person, doing business since 1972 and a regular IT assessee since A.Y. 1995-96 and the assessee had filed copies of his IT returns from A.Y. 2002-03 to 2009-10 to the AO vide letter dated 16.11.2011. Hence the source of deposits of Rs. 7,74,000/- by the assessee 8 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar were from his past capitals, past savings, recoveries from debtors (as proving that assessee showing interest income), withdrawals from the banks during the year receipts from business. Thus the source of Rs. 7,74,000/- is very clear from the facts and record itself. Hence the ld. AO as well as the ld. CIT(A) has wrongly added this amount of Rs. 7,74,00/- and blindly ignored the same. Now in respect of the remaining amount of Rs. 22,14,000/- received from five persons, it was submitted that as per the letter of the AO dated 16.09.2011 written to the District Excise Officer Sikar, the total demand draft (DD) of Rs. 28,38,732/- has been made and deposited in the District Excise Office, Sikar. Out of Rs. 28,38,732/-, the DD of Rs. 20,62,000/- was in the name of Shri Dayal Singh in whose name the license has been allotted and Rs. 4,00,000/- was of assessee and remaining of Rs. 3,76,732/- was of other persons. All the DDs have been made between 11.02.2009 to 19.03.2009. DD's of Rs.8,05,332/- has been made from the bank of Baroda A/c and DD's of Rs. 20,33,400/- has been made from the Central Bank of India.
It was submitted that out of the DD's of Rs. 28,38,732/-, the following DD's were cancelled. The DD's of Rs. 8,09,452/- has been cancelled and has come back in the A/c of Central Bank of India as under:
23.02.2009 2,99,000/-
04.03.2009 3,99,888/-
16,03,2009 32,388/- 16.03.2009 32,388/- 02.04.2009 44,900/- Total 8,09,452/- 9 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar
The DD's of Rs.6,30,000/- has been cancelled and has came back in the a/c of Bank of Baroda as under:
04.03.2009 5,00,000/-
16.03.2009 32,500/-
08.04.2009 32,500/-
08.04.2009 32,500/-
08.04.2009 32,500/-
Total 6,30,000/-
Thus out of Rs. 28,38,732/-, the DD's of Rs. 14,39,452/- has been cancelled and the DD's of Rs.13,99,280/- has been retained by DEO office Sikar on account of shop or license allotted to Shri Dayal Singh in the partnership M/s Gajanand Dayal Singh. The DD's of Rs. 20,62,000/- were made in the name of Shri Dayal Singh and out of this, DD's of Rs. 7,30,720/- has been cancelled.
Thus the assessee has received Rs. 22,14,000/- from the above persons out of which Rs. 13,99,280/- has been kept by the DEO Sikar. Hence the assessee had to return only Rs. 8,14,720/- [22,14,000 (-) Rs.13,99,280/-] to the above persons, which has been returned by the assessee after withdrawals from the banks in the year itself as under vie bank statements.
Date Name of Bank Amount (Rs) 14.03.2009 Central Bank of India 2,00,000/- 16.03.2009 Central Bank of India 2,00,000/- 14.03.2009 Bank of Baroda 3,50,000/- Total 7,50,000/- 10 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar
Now the amount remained of Rs.64,720/- (Rs.8,14,720-7,50,000/-) for which we hereby clarified that there may be some difference on account of DD's amount, DD's cancelled amount or returned due to the reason there were some charges of DD's preparation, DD cancellation charges also the charges of application to DEO's Sikar etc. which has been adjusted from Rs. 64,720/- the DEO itself stated in his letter. After adjustment the same if any amount has remained to be paid to those persons, the same has been paid out of from the cash available with him out of his business, cash in hand available with the assessee and some amount has been paid in next year as clear from the withdrawals from the bank. The above details has been given as per bank statements and informed by the assessee. Thus all the above entries are clearly coming from the both bank statements and also enclosed for next year as desired by the Hon'ble Bench. For the proof we have already filed the copy of audited a/c and return of M/s Gajanand Dayal Singh for A.Y. 2010-11 showing the income from Bhang Doda Post shop.
Further all the persons who have deposited their cash in the bank account of assessee are IT assessee except one and filling their IT return. However the ld. AO and CIT(A) both ignored the same and has not given credit of a single Rupee. Hence the ld. AO and CIT(A) has wrongly added all the cash deposits in the both bank account of the assessee.
The ld. AO and Ld. CIT(A) doubted the creditworthiness of persons and has made the addition only and only on the basis of suspicion. They have not brought any single evidence on record in support of them except assumption, presumption and suspicion and we have already stated no addition can be made on the basis of suspicion or doubt. Further the persons have explained the source of money given to the assessee. Hence it is wrong that the persons not having much income but they can take borrow from other persons to start any business. The duty of the assessee was only to the extent to prove the sources here. The assessee has provided the sources of source as the person had stated in their statement. As per settled legal position the assessee is only 11 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar required to prove the sources not sources of sources of sources. If the AO was having any doubt he could have taken the action in the hands of persons.
Further the assessee in support has filed the affidavits of the persons, their ITR, their statements has been recorded in which they have explained with source and purpose of giving cash deposits in the bank account of the assesee. When all these evidences are on record when they have not been rebutted with the help of evidence no addition can be made only and only assumption, presumption and suspicion. Therefore the position is very clear, hence the addition so made may kindly be deleted in full.
2.4 The ld DR is heard who has relied on the order of the lower authorities.
2.5 We have heard the rival contentions and perused the material available on record. Regarding source of cash deposit of Rs 29,88,000 in the two bank accounts maintained by the assessee, the ld AR has contended that Rs 7,74,000 is out of assessee's own money out of past savings, etc and the balance Rs 22,14,000 has been received from various persons to apply for licence for Bhang/Doda-posta shops. The amount so collected has been used for getting the various demand drafts prepared for the purposes of applying for the licence for Bhang/Doda-posta shops. The Assessing officer has written to District Excise officer, Sikar vide its letter dated 16.9.2011 available at APB 70-71 to verify whether Demand Drafts valuing to Rs 28,38,732 have been received by your department or not, the purpose for which the DDs have been received by your department and specify the details of the person to whom contract was finally given. The District Excise officer vide its letter dated 3.10.2011 available as APB 72 has confirmed the receipt of the demand draft 12 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar from the persons whose name were specified in the AO's letter. It was further confirmed in the said letter that these demand drafts were in respect of excise department's tender calling for application for allotment of Bhang/Doda post for the financial year 2008-09 and the applications submitted pursuant to such tender. It was further stated in the said letter that Sh. Dayal Singh along with Sh. Gajanand was allotted the licence and in respect of rest all persons, the DDs have been returned. In light of this, what emerges is that DDs have been prepared in the name of persons who, the appellant claims, to have deposited the money in his two bank accounts and subsequently, either the licence has been allotted to them or the DDs have been returned back. The assessee's bank account has thus been used for the purposes of getting the DDs issued by the banks for applying for Bhang/Doda post licence. The DDs, which have been returned, were subsequently deposited in the bank accounts of the appellant from where they were issued and the money has then been claimed to have been refunded to the respective persons. The appellant has thus tried to establish a linkage in terms of initial cash deposit, subsequent issuance of demand drafts and refund of the money to the respective persons. The ld AR has submitted that out of total demand Drafts valuing at Rs 28,38,732 issued out of cash deposits, the DDs valuing at Rs 13,99,280 were retained by excise department in respect of licence issued to Sh Dayal Singh and balance DDs valuing at Rs 14,39,452 have been returned and subsequently cancelled. Thus, in terms of amount repayable to these persons, it comes to Rs 814,720 (Rs 2214000 less Rs 13,99,280) and the assessee has repaid Rs 750,000 to respective persons as evident from its bank statements and the balance Rs 64,720 relates to DDs preparation/cancellation charges, etc. 2.6 The above factual matrix explains the utilisation of money once the money has been deposits in the bank accounts maintained by the assessee.
13 ITA No. 166/JP/13Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar Mere application to the District Excise officer in name of these persons along with the demand draft doesnot establish that the money originally belong to those persons. In the context of section 69 of the Act, the primary question that arises for consideration before us is whether the assessee has discharged its primary onus of explaining the initial source of the deposits made in his two bank accounts. In other words, whether the money belong to the four persons as claimed by the assessee or the money actually belongs to the assessee. In this regard, we have gone through the contentions of the ld AR as well as carefully examined the material which is available on record and are of the view that the ld CIT(A) has rightly come to a conclusion that the appellant has not been able to discharge his primary onus of proving the creditworthiness of the aforesaid four persons and the genuineness of transaction and accordingly, we confirm the following findings of the ld CIT(A):
"I have duly considered the submission of the ld. AR and the material available on records. I have perused the affidavits and the sworn statements of the four creditors and agree with the conclusion of the AO that appellant has not been able to prove the credit worthiness of the aforesaid creditors and the genuineness of the transaction. There are several contradictions and inconsistencies in the explanation of the appellant submitted from time to time. In his letter dated 30.08.2011, it was stated that the appellant provided only technical service to the said four creditors for obtaining the license for which he earned commission/dalali. However in the undated agreement filed during the appeal proceedings , it was stated that assessee entered into partnership agreement with those persons to do the business of Bhang/Doda Posta where profits/loss of the business were to be shared in the ratio of their capital contribution. Appellant filed the audited accounts of the business allegedly done by Shri Rajendra Singh and Shri Dayal Singh though these persons were themselves not aware about their business and did not mention anything about it in their sworn statements. This shows that the appellant concocted the evidences to substantiate their credit worthiness. While the cash of Rs. 16,30,000/- was claimed to have been received from Shri Dayal Singh later confirmed only payment of Rs.8 lacs to the appellant. None of the alleged creditors could produce any 14 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar evidence to substantiate their sources of payments to appellant. It is beyond imagination that the persons of no means like a labourer in hotel or an electrician or a salesman of Bhang/Doda Post shop can lend lacs of rupees to the appellant."
"It is a settled position of law that the entire onus is on assessee to prove the identity & credit worthiness of the creditors and the genuineness of transaction. Mere proof of identity of creditors or mere filing their income tax numbers / return is not enough to prove the genuineness of credits. Sources of cash deposited in the bank account of the assessee has to be satisfactorily explained by him, otherwise the same can be treated as his unexplained income u/s 69 of the Act. Reliance is placed on the decisions in the case of CIT vs. K. Chinnatharmban (292 ITR
682)(SC) and Manoj Aggarwal vs. DCIT (113 ITD 377) (SB. Del.). In view of above discussion, it is held that the appellant has not been able to discharge his onus of proving the credit worthiness of the aforesaid four persons and the genuineness of transaction."
2.7 The necessary corollary of the above finding is that all the money, which has been found deposited in his two banks, belongs to the appellant. Section 69 provides that where in the financial year, the assessee has made investments which are not recorded in the books of accounts, if any maintained by him for any source of income. Undisputedly, the money deposited in the appellant's bank accounts are investments by way of deposits and such deposits doesn't find recorded in the books of account. Regarding the nature and source of deposits, the ld AR has submitted that the assessee is an old person, doing business since 1972 and a regular IT assessee since A.Y. 1995-96 and the assessee had filed copies of his IT returns from A.Y. 2002-03 to 2009-10 to the AO vide letter dated 16.11.2011. Hence the source of 15 ITA No. 166/JP/13 Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar deposits of Rs. 7,74,000/- by the assessee were from his past capitals, past savings, recoveries from debtors (as proving that assessee showing interest income), withdrawals from the banks during the year and receipts from business. Since we have held above that the all the money deposited amounting to Rs 29,88,000 in the two bank accounts belong to the assessee, the above explanation regarding source of such deposits thus has to be seen and examined in context of deposit of Rs 29,88,000. However, we find that there is no finding by the AO in this regard. We therefore, set-aside the matter to the file of the AO to examine a fresh the source of cash deposits in the appellant's bank accounts taking into consideration the above explanation by the ld AR. Where the appellant's is able to provide appropriate explanation to the satisfaction of the AO, the AO will provide appropriate relief to the appellant. In a situation, where the appellant is unable to provide appropriate explanation to the satisfaction of the AO or the AO is not fully satisfied with the appellant's explanation, given the periodicity of deposits and utilisation of such deposits from time to time, the AO is directed to apply the well-accepted peak theory to determine the quantum of additions in the hands of the appellant.
With the above directions, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 02/12/2016.
Sd/- Sd/-
(KUL BHARAT) (VIKRAM SINGH YADAV)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
16
ITA No. 166/JP/13
Shri Bhanwaroo Khan Chopdar vs. ITO, Ward-1,Sikar
Jaipur
Dated:- 02/12/2016
Pillai
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Bhanwaroo Khan Chopdar, Sikar
2. izR;FkhZ@ The Respondent- ITO, Ward-1, Sikar
3. vk;dj vk;qDr@ CIT -III, Jaipur
4. vk;dj vk;qDr¼vihy½@The CIT(A)-III, Jaipur
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 166/JP/2013) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar 17